The table below presents 2022 and 2021 net income attributed to shareholders consisting of core earnings and items excluded from core earnings. For the years ended December 31, ($ millions) 2022 2021 Coreearnings $ 6,182 $ 6,536 Items excluded from core earnings:(1) (2) Investment-related experience outside of core earnings 817 1,642 Direct impact of equity markets and interest rates and variable annuity guarantee liabilities (840) (817) (3) Directimpactofequitymarketsandvariableannuityguaranteeliabilities (995) 289 (4) Fixedincomereinvestmentratesassumedinthevaluationofpolicyliabilities 576 (346) (4) SaleofAFSbondsandderivativepositionsintheCorporateandOthersegment (421) (228) (5) Changestotheultimatereinvestmentrate – (532) (6) Change in actuarial methods and assumptions 36 (41) (7) Restructuring charge – (115) (8) Reinsurance transactions, tax-related items and other 1,099 (100) Totalitemsexcludedfromcoreearnings 1,112 569 Netincomeattributedtoshareholders $ 7,294 $ 7,105 (1) These items are disclosed under OSFI’s Source of Earnings Disclosure (Life Insurance Companies) guideline. (2) In accordance with our definition of core earnings, we include up to $400 million of net favourable investment-related experience reported in a single year, as core investment gains (see “Non-GAAP and Other Financial Measures” below). Items excluded from core earnings include net investment-related experience in excess of $400 million per annum or net unfavourable investment-related experience on a year-to-date basis. In 2022, the investment-related experience net gain of $817 million reflected the favourable impact of fixed income reinvestment activities, strong credit experience, and higher-than-expected returns (including fair value changes) on ALDA primarily driven by private equity, infrastructure, and timberland, partially offset by real estate. In 2021, the investment-related experience net gain of $1,642 million reflected higher-than-expected returns (including fair value changes) on ALDA primarily driven by gains on private equity and infrastructure, strong credit experience and the favourable impact of fixed income reinvestment activities. (3) In 2022, the net charge related to equity markets of $995 million included a charge of $893 million from gross equity exposure and a charge of $111 million from dynamic hedge experience, partially offset by a modest gain of $9 million from macro hedging experience. In 2021, the net gain of $289 million included a gain of $382 million from gross equity exposure, partially offset by a charge of $90 million from dynamic hedge experience and a modest charge of $3 million from macro hedging experience. (4) In 2022, the gain due to fixed income reinvestment rates of $576 million was primarily due to the flattening of the yield curve in the U.S. and Canada, partially offset by losses on the sale of available-for-sale bonds. In 2021, the charge due to fixed income reinvestment rates of $346 million was primarily due to the increase in risk-free interest rates and the overall steepening of the yield curve in the U.S. and Canada. (5) In 2021, the Canadian Actuarial Standards Board issued a new promulgation with reductions to the ultimate reinvestment rate (“URR”) and updates to the calibration criteria for stochastic risk-free rates. The updated standard included a reduction of 15 basis points in the URR and a corresponding change to stochastic risk-free rate modeling and was effective October 15, 2021. The long-term URR for risk-free rates in Canada is prescribed at 2.9% and we use the same assumption for the U.S. Our assumptionforJapanis1.5%. (6) See “Critical Actuarial and Accounting Policies – Review of Actuarial Methods and Assumptions” section below for further information on the 2022 and 2021 charges. (7) In 2021, we reported a restructuring charge of $150 million pre-tax ($115 million post-tax) related to actions that are expected to result in recurring total annual expense savings of $250 million (pre-tax) by 2023; $100 million (pre-tax) of these expected total annual savings were realized in 2021, $200 million (pre-tax) were realized in 2022, and $250 million (pre-tax) are expected to be realized in 2023.1 (8) In 2022, the $1,099 million of gain included a net gain of $846 million from the U.S. variable annuity reinsurance transactions and a net gain of $86 million related to acquiring full ownership interest of Manulife TEDA Fund Management Co., LTD (“MTEDA”) by purchasing the remaining 51% of shares from our joint venture partner, partially offset by a charge of $71 million related to withholding tax on anticipated remittances resulting from the U.S. variable annuity reinsurance transaction, a charge of $17 million resulting from a reinsurance transaction in Asia, a $13 million increase to an existing legal provision in the U.S. and an integration charge of $8 million in our Vietnam operation. In addition, we reported tax benefits of $297 million in 2022 as a result of an increase in the Canadian corporate tax rate. In 2021, the $100 million net charge included a $119 million charge relating to updating the impact of the 2017 U.S. Tax Cuts and Jobs Act and a $37 million charge resulting from a reinsurance transaction in the U.S., partially offset by a $37 million gain related to affiliate reinsurance transactions in Asia and a $19 million gain related to the divestment of our Thailand operation. Net income attributed to shareholders by segment is presented in the following table. See Asia, Canada, U.S., and Global WAM sections below. (1) For the years ended December 31, % change ($ millions) 2022 2021 2022 vs 2021 Netincomeattributedtoshareholdersbysegment Asia $ 2,224 $ 3,057 (27)% Canada 1,530 1,354 13% U.S. 3,950 2,080 90% Global Wealth and Asset Management 1,321 1,406 (6)% Corporate and Other (1,731) (792) (119)% Totalnetincomeattributedtoshareholders $ 7,294 $ 7,105 3% (1) Percentage change is on an actual exchange rate basis. Diluted earnings per common share was $3.68 in 2022, compared with $3.54 in 2021 primarily related to the increase in net income attributed to common shareholders. Diluted core earnings per common share was $3.10 in 2022, compared with $3.25 in 2021 primarily related to the decrease in core earnings. The diluted weighted average common shares outstanding was 1,913 million in 2022 and 1,946 million in 2021. Return on common shareholders’ equity (“ROE”) for 2022 was 14.1%, compared with 14.2% for 2021 and core return on common shareholders’ equity (“core ROE”) was 11.9% in 2022 compared with 13.0% in 2021. The decrease in 2022 ROE and core ROE were primarily driven by a decrease in common shareholders’ core earnings. 1 See “Caution regarding forward-looking statements” above. 12 | 2022AnnualReport | Management’sDiscussionandAnalysis